- Deliveroo founder William Shu told Business Insider “I think an IPO is somewhat logical” for his company.
- The delivery startup’s size and recent investors are signals that this company could well go public.
Shu also discussed his strategy for America.
Deliveroo founder and CEO William Shu told Business Insider that an IPO would be a logical next step for the food delivery company, given its size, ambition, and the lead investors in its last gigantic round of financing. The company is currently valued at over $US2 billion (£1.5 billion), and has taken $US860 million (£654 million) in venture funding so far — staggering sums given that it was only founded in 2013.
In Deliveroo’s last Series F round of funding, the lead investors were T. Rowe Price and Fidelity — two traditional financial institutions. Normally, tech startups get their money from smaller venture capital funds.
When asked by Business Insider at the Web Summit technology conference in Lisbon if he had to stage an IPO so that his investors could see a return on the nearly $US900 million (£685 million) they have invested, Shu replied, “We’re thinking about all kinds of possibilities. I think an IPO is somewhat logical given the lead investors in this last round. Those are public market investors, T. Rowe Price and Fidelity.”
Would Shu be comfortable running a public company (as opposed to a private one), given all the extra scrutiny and distraction that comes with it?
“What I am focused on is running the company and winning, and really building a product which means the best restaurants for consumers, and getting food to them quickly. Whether that’s in the private space or public space is — there’s definitely differences,” he said. “But ultimately … there’s pros and cons to both, right? I think that for me that’s my focus and whether that be in the public arena or private arena, that’s fine.”
Deliveroo currently has more than 1,000 employees in 12 countries, covering more than 150 cities.
‘The US is a market that, I think, if we want to go in we have to go into a lot of cities simultaneously’
The one obvious place Deliveroo is not, however, is the US, even though Shu is originally American. The US seems an obvious place for Deliveroo to grow given Americans’ love of both food and apps.
“The US is a market that, I think, if we want to go in we have to go into a lot of cities simultaneously, it’s such a big market,” he says, and thus the company has stayed away so far. “We’re focused on what we’re doing right now” in the other 12 countries, he said.
Of course, if your plan to conquer America required a multi-city launch there, you’d need a lot of financing for that … which might make an IPO even more tempting.
Shu also told us that Deliveroo routinely fields acquisition interest from other companies. “There’s always strategic discussions, inbounds and outbounds, but we want to build one of the biggest companies in the world. That’s what we’re focused on, so that stuff is not of super-interest, especially after raising a lot of money as well.”
It’s normal for companies to continuously engage in discreet “strategic” discussions with potential acquirers, of course. But it’s less usual for a CEO to say that aloud. The company is likely worth a lot more than its paper value of $US2 billion-plus, so a potential acquirer would have to be massive (Uber would be one obvious partner), making the list of contenders very short, and an IPO more tempting.
Shu’s statements dovetail with the thoughts of Martin Mignot, a partner at Index Ventures and a Deliveroo investor and board member, who told Business Insider in September, “Obviously the idea is in the next few years, hopefully the company can be in a position to IPO then, at that stage, the public market will want to see a clear path to profitability.”
Shu also reconfirmed one other ongoing matter of record: He still does food deliveries on occasional Sundays like a normal Deliveroo rider, and none of his customers have yet twigged that their pizzas were delivered by the CEO of the company.